Talking in Singapore, Agustin Carstens, the general manager of the Bank for International Settlements (BIS), spoke about a unified ledger that supports central bank digital currency (CBDC), tokenized deposits from banks and digital assets. At the same time, he says there are serious doubts about stablecoins functioning as money, reports Ledger Insights.
The unified ledger concept sounds similar to Citi’s idea of a Regulated Liability Network (RLN), which now has interest from the New York Federal Reserve, SWIFT, BNY Mellon, Wells Fargo, HSBC and a host of other institutions.
Carstens was upbeat about blockchain features such as smart contracts that support programmability and composability, the ability to build complex solutions from someone else’s work in a similar way to open source code.
“Programmability and composability do not require decentralized or permissionless platforms. All the potential benefits I just outlined can be achieved in permissioned platforms with various degrees of centralization,” said Carstens. “CBDCs and tokenized deposits do not represent new types of money. Instead, they replicate existing forms of money in a technologically superior way.”
He envisions CBDCs and tokenized deposits existing in separate partitions of the unified ledger. The example of escrowed money for a house purchase was given. A smart contract could lock the buyer’s money and automatically release it as soon as the process completes. Commercial banks might not be enamored to hear Carstens suggest that payment be made in digital central bank money. Apart from the tokenisation of bank deposits, the BIS is embracing the tokenisation of other assets.